Critical Comparison: Ulta Beauty (ULTA) and SpendSmart Networks (SSPC)

Ulta Beauty (NASDAQ:ULTA) and SpendSmart Networks (OTCMKTS:SSPC) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, valuation, risk and earnings.

Analyst Recommendations

This is a summary of current recommendations for Ulta Beauty and SpendSmart Networks, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ulta Beauty 0 6 19 0 2.76
SpendSmart Networks 0 0 0 0 N/A

Ulta Beauty presently has a consensus price target of $289.91, indicating a potential upside of 2.04%. Given Ulta Beauty’s higher possible upside, analysts clearly believe Ulta Beauty is more favorable than SpendSmart Networks.

Valuation & Earnings

This table compares Ulta Beauty and SpendSmart Networks’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ulta Beauty $5.88 billion 2.86 $555.23 million $8.16 34.82
SpendSmart Networks $5.79 million 0.04 -$3.32 million N/A N/A

Ulta Beauty has higher revenue and earnings than SpendSmart Networks.

Profitability

This table compares Ulta Beauty and SpendSmart Networks’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ulta Beauty 9.99% 33.75% 19.71%
SpendSmart Networks N/A N/A N/A

Institutional & Insider Ownership

89.5% of Ulta Beauty shares are owned by institutional investors. 5.6% of Ulta Beauty shares are owned by company insiders. Comparatively, 39.5% of SpendSmart Networks shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Ulta Beauty has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, SpendSmart Networks has a beta of -0.09, indicating that its stock price is 109% less volatile than the S&P 500.

Summary

Ulta Beauty beats SpendSmart Networks on 10 of the 11 factors compared between the two stocks.

Ulta Beauty Company Profile

Ulta Beauty, Inc. operates as a beauty retailer in the United States. The company's stores offer cosmetics, fragrances, haircare and skincare products, bath and body products, and salon styling tools; salon services, including hair, skin, and brow services; and others, including nail products and accessories. It provides private label products, such as the Ulta Beauty Collection branded cosmetics, skincare, and bath products, as well as Ulta Beauty branded products. As of November 3, 2018, the company operated 1,163 retail stores across 50 states. It also distributes its products through its Website, ulta.com, which includes a collection of tips, tutorials, and social content. The company was formerly known as Ulta Salon, Cosmetics & Fragrance, Inc. and changed its name to Ulta Beauty, Inc. in January 2017. Ulta Beauty, Inc. was founded in 1990 and is based in Bolingbrook, Illinois.

SpendSmart Networks Company Profile

SpendSmart Networks, Inc., doing business as SMS Masterminds, provides proprietary loyalty systems, and a suite of digital engagement and marketing services to merchants. It delivers and manages loyalty platforms, such as merchant funded rewards, loyalty rewards tablets/kiosks, and proprietary rewards management systems; and mobile marketing technology, including text and email messaging, customer analytics and propensity marketing, patent pending automated engagement engine, and Text2Win sweepstakes features. The company also delivers and manages enterprise level loyalty and mobile marketing consulting comprising monthly hands on reviews by its Certified Masterminds, campaign creation and optimization, and localized support. In addition, it delivers and manages proprietary mobile-responsive Website building platform, which includes software allowing licensees and merchants to create and administer their Websites, audits of existing merchant Websites, and integration of social media streams and consumer reviews into Websites. The company was formerly known as The SpendSmart Payments Company, Inc. and changed its name to SpendSmart Networks, Inc. in June 2014. SpendSmart Networks, Inc. was founded in 2007 and is headquartered in San Luis Obispo, California.

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